7 Highlights from 2018 in Healthcare: More Fits Than Starts

Published January 9, 2019

The year 2018 was blissfully quiet on the healthcare front. There were no major overhauls of the industry, the Affordable Care Act was not repealed, despite a lot of noise to that effect in Washington, and there were no major market failures among the big payers. Progress in the information technology sector experienced more fits than starts. Here is our year-end review of the most notable news items from 2018.

1. Amazon flexes its muscle in the healthcare market

In January, Amazon announced it was joining forces with Berkshire Hathaway and JPMorgan to launch a company aimed at cutting healthcare costs for their U.S. employees. New Yorker contributor and former Clinton White House advisor Dr. Atul Gawande was tapped to head the new division in June. In February, rumors surfaced that Amazon was positioning itself to become the major supplier to hospitals and clinics, based on its Amazon Business platform. However, by mid-year, those plans were appearing to bog down in bureaucratic red tape.

2. Apple wants to own your health records

Access to one’s own personal healthcare records has been a problem for a long time, despite the dominance of electronic health records and cloud-based storage systems. Now Apple is attempting a solution to what industry insiders call the “interoperability problem”. This year, Apple announced it was partnering with major medical centers to make health records downloadable to a cell phone app. Hundreds of institutions joined the effort in 2018.

3. Watson stumbles

IBM made a big splash in 2011 when its artificial intelligence (AI) project, Watson, beat the world champion Jeopardy player. A fair amount of excitement was generated by IBM’s announcement that Watson would apply its AI prowess to predictive analytics in healthcare. By the fall, however, the market was throwing buckets of cold water on Watson. The University of Texas’ M.D. Anderson Center pulled out of a $62 million contract for a disease-prediction module that turned out to be a bust. Massive layoffs ensued in the Watson division. In October, the Watson Health chief stepped down.

4. SUSTAIN Care Act of 2018

Without much fanfare in February, Congress delivered a significant boost to home care as part of its “Bipartisan Budget Act of 2018.” Called the “Strengthening and Underpinning the Safety-neT to Aid Individuals Needing care act of 2018” or SUSTAIN, the measure would provide a rural home health add-on and repeal Medicare cap payments for therapy, among other measures. The fate of these measures continues to blow in the political winds.

5. GE spins off health

General Electric had its own healthcare division as well, until June 2018 that is, when the multinational conglomerate decided to focus on its core businesses, aviation, power and energy. The market liked the move: GE’s stock price soared. How well GE Healthcare will fare on its own remains to be seen.

6. The direct-to-consumer market isn’t for the meek

Ancestry.com and 23andMe have been locked in a death struggle for dominance of the direct-to-consumer DNA market. In June 2018, 23andMe sued its larger competitor for copyright infringement alleging that Ancestry stole their method for identifying one’s relatives from a sample of DNA. With more than 15 million customers paying $60 for a kit to learn about susceptibility to disease as well as their Native American heritage, there is a lot more than spit at stake.

7. Midterm election returns: Money still talks

The biggest news for healthcare from the November elections had to do not with candidates, but rather with a series of ballot initiatives. In Massachusetts, a ‘Yes’ on Question 1 would have placed strict limits on the number of patients a nurse could care for in most hospitals in the state. At 621 words, it is not clear how many voters actually read the ballot proposal, so advocacy organizations obligingly broke it down for them. After $30 million in total advertising spent, the hospital organization lobbyists prevailed over the nursing union lobbyists. Question 1 was defeated by more than 2:1 margin.

Four states (Idaho, Montana, Nebraska and Utah) proffered ballot questions regarding Medicaid expansion. All but Montana passed the measures, that effectively increased Medicaid eligibility to 138% of the poverty line. The failure of the measure in Montana may have been tied to the fact that funding for the expansion would have been mandated to flow directly from a substantial hike in cigarette and tobacco product taxes.

Progress is seldom smooth or predictable, even in industries such as healthcare that face risks of disruption from internet-based businesses, to say nothing of the effects of the powerful patient-centered care movement. Healthcare in 2018 may have been characterized by more snafus than successes, but another year is here and that could all change in a flash.